BUDWEISER BLACK CROWN AND THE INEVITABLE DOWNFALL OF AB INBEV

A few months back, Bloomberg Businessweek published an article entitled “The Plot to Destroy America’s Beer” which outlined the drastic cost (and as a result, quality) cutting measures enacted by CEO Carlos Brito for many products under the AB InBev banner. It isn’t any news to craft beer lovers that their beer is sub par, but according to this article, one time fans of their product are starting to notice it too and it isn’t sitting well with them. In addition to cutting costs by using cheaper materials on things like cardboard and glass, AB InBev’s cost cutting measures have also extended to raw ingredients, the quality of rice for example, as well as leaving long time providers of hops and beechwood, opting for a cheaper and seemingly inferior providers. I won’t harp on about the article, but it is a great read for anyone interested in how the beer business works and how the quality of ingredients and profit are sometimes inversely related.

A Rogues gallery of pseudo-craft offerings.

A Rogues gallery of pseudo-craft offerings.

Not long after this article was published, Budweiser released it’s first real attempt at a foray into craft beer, the “Project Twelve” collection, boasting “Twelve Cities, Twelve Brewmasters. 3 Limited edition beers.” The challenge to the brewmasters at each of their 12 US breweries was to “create a new, unique beer worthy of the Budweiser name. There was only one rule: each new recipe must pay homage to Budweiser’s signature clean and crisp taste by using the proprietary yeast directly descended from the original Budweiser yeast culture used by Adolphus Busch in 1876 and still used today.” I picked up a 12 pack one weekend out of sheer curiosity (and for research) and wasn’t particularly blown away by any of the offerings. It’s no secret that we Aleheads are not fond of Budweiser, but these so called “experimental” and “unique” beers tasted at their core, like normal Budweiser. One of the beers, batch #91406 (named after the zip code for lovely Van Nuys, CA) was selected to become Budweiser’s latest market offering since the Bud Light Platinum, Budweiser Black Crown. It wouldn’t be a proper AB InBev release without the ubiquitous high budget Super Bowl commercial, this one featuring an attractive and diverse cast of Brett Easton-Ellis novel types who look like they’ve never had a beer in their life. “Here’s to our beer” the Don Draper doppelgänger proclaims while the fashionable masses cheer for the latest in “great beer.” Problem is, who the “our” in the statement is becoming more and more vague.

"Gentlemen, to staying relevant."

“Gentlemen, to staying relevant.”

So what does Black Crown mean for AB InBev and the beer community in general? Well, some may see it as Budweiser’s first serious attempt at a branded craft beer and a possible threat to the independent breweries that you and I love so dearly. Others, such as Derek Thompson of the Atlantic, see it as their attempt to catch up to a market that is rapidly turning away from mass produced beer. It is no secret that craft beer is growing like never before, at a rate the likes of which we haven’t seen since Prohibition and I don’t put it past AB InBev to throw out a few hail Mary’s on their way down. However, after the recent and drastic cost cutting measures and alienation of long time consumers, Budweiser is going to need a lot more than another flashy commercial and slick bottle to undo the damage that craft brewing has already instilled upon them. Brewing isn’t a cheap undertaking, but few craft brewers are willing to put the quality of their product on the line for the sake of cost cutting the way that AB InBev has and this is exactly why Macro-brewers are struggling to stay relevant. You can’t build a better mousetrap by cutting corners and you certainly cannot brew a superior beer when you don’t care about the quality of what goes into it. Is this the tipping point that signifies the true downturn of the once mighty Budweiser? We Aleheads sure hope so.
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8 comments

  1. I couldn’t have written it better myself! In fact – I didn’t write it better but I did write it differently:

    http://alemonger.wordpress.com/2013/02/11/budweiser-bares-it-all-with-black-crown-or-is-it-black-clown/

    Great minds drink (and write) alike. Cheers!

    1. Likewise, I almost wrote a very similar post for this site a while back. When I saw the title, I thought maybe I had written something, forgotten, and then witnessed it self-publish.

      Things to touch on, I think: Anheuser’s inability to expand Bud into any more markets, because they’re out of paths to expansion, and also the seeming inevitability that for each person to try “crafty” beer for the first time via an AB product, doesn’t that just make them more likely to experiment in the craft world in the future?

      This market is like if Wonder Bread dominated store shelves, but artisan bakeries began having more success, so Wonder Bread releases slightly better bread that comes with a set of directions to your local artisan bakery in it. I don’t think that produces a net positive reaction.

      1. I agree with your observations/questions regarding experimentation with AB’s “crafty” brews (i.e. Black Crown). That’s partially why I asked who Bud is targeting BC to in my post. Where do they want “Black Crown converts” to go next? At times I wonder if they sought out to brew a gateway beer such as Blue Moon? If so, a gateway to Goose Island? Hard to make that connection for me. Also, they’d only be cannibalizing their own sales, wouldn’t they? Sales that have already been in decline due to the legitimate craft beer industry and better educated beer drinker overall.

        Good Wonder Bread analogy – right on point.

        Cheers Again!

  2. Guess we’re all in the same boat. I also touched on this, although focusing on that Derek Thompson piece: http://bit.ly/156ZnX1

    Great minds, and all that…

    I think what is worrisome about Black Crown is its parallel to the launch of Bud Light Platinum, which already has 1 percent market share after one year of existence. Now Platinum has Justin Timberlake as its official spokesman. Things are looking up for sales, I’m sure.

    What threw me off most about Thompson’s piece was that he seems to draw the line between AB InBev’s “crafty” movements and the idea that higher ABV brews is what people want. Not so. People just want good tasting beer!

    … and if that’s the case, I don’t know if AB InBev is up for the task.

    Cheers!

    1. Hi Bryan

      Bottom line first: ABInBev is certainly not up the task as far as actually brewing legitimate craft beers. They’re not built for it from an operational or philosophical perspective. They’ve also invested billions of dollars over decades to “cultivate” their consumers – to breed out the desire to appreciate “taste” or ability to exercise independent judgment. Their consumer is motivated by slick ads and often brings home a 30 pack of Bud (or Miller – big beer is all the same) simply because their fathers and grandfathers did.

      As far as ABV is concerned, I mentioned it my post because it was clear to me that AB wanted to attract consumers by highlighting the higher ABV in Black Crown. Again, another massive misunderstanding by Big Beer as to what craft beer consumers want. That said, the typical Big Beer drinker probably would gravitate to a higher ABV swill. Achieving a buzz is a factor for many of them, whereas, it’s an afterthought at best for the overwhelming majority of craft beer fans.

      It remains to be seen where this will go or if BC will be a success. One thing I’m practically certain of is that Big Beer – ABInBev & MillerCoors – will eventually tire of being “crafty” and will buy out more legit craft brewers. That’s their only way “in” to the market.

      1. Bingo – when you can’t beat them, buy them.

        While the change has been slow and steady, I am encouraged by the general interest in good tasting craft beer over the generic swill that AB InBev produces. But like you point out, it’s hard to change a culture that has been bludgeoned to think otherwise.

        I will never, ever forget Keystone’s “Bitter Beer Face” commercials, as if there’s something wrong with having a multitude of flavors in a beer that aren’t based off of adjuncts. Heaven forbid hops play a part as well!

  3. I love the new bud black crown. It has a good amount of alcohol and is good for a college student on a budget. I like to try “craft” beers but there is no way someone could drink those on a regular. Goo team bud!

  4. I much prefer a good craft beer but it’s just not available out here in the sticks. I either brew my own which has had mixed results, travel out of my way for over an hour on the way home or stop by the local Quick stop and pick up something. I picked up some Black Crown and it’s not bad. Given a choice, I would not have picked it but… I will buy it again in the same circumstance.

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